Communication from the Commission - Additional Commission contribution to the Intergovernmental Conference on institutional reforms The criminal protection of the Community's financial interests: a European Prosecutor
Date: 2000-09-29
Institutions: European Commission
Subjects: EU institution, European official, enlargement of the Union, financial interests of members, institutional reform

COMMISSION OF THE EUROPEAN COMMUNITIES

Brussels, 29.09.2000
COM(2000) 608 final

COMMUNICATION FROM THE COMMISSION

Additional Commission contribution to the
Intergovernmental Conference on institutional reforms

The criminal protection of the Community’s financial interests:
a European Prosecutor

COMMUNICATION FROM THE COMMISSION

Additional Commission contribution to the
Intergovernmental Conference on institutional reforms

The criminal protection of the Community’s financial interests:
a European Prosecutor

INTRODUCTION

the Commission suggests

in connection with the protection of

In its opinion of 26 January 2000 “Adapting the institutions to make a success of
enlargement”,1
the
Community’s financial interests that a legal basis be created in the Treaty for setting up a
system of rules relating to offences and the penalties that
to the requisite
procedural provisions for the prosecution of these offences and to the powers and tasks of a
European Public Prosecutor responsible for detecting fraud offences throughout European
territory and for prosecutions in the national courts. In the framework of its new anti-fraud
strategy,
the Commission has confirmed its wish to strengthen the protection of the
Community’s financial interests in this respect.

they incur,

interests
In 1998 fraud and other irregularities affecting to the Community’s financial
accounted for a total estimated by the Member States and by the Commission at over a billion
euros.2 The involvement of organised crime in fraud to the detriment of the Community’s
financial interests and the transnational character of such crime presuppose cooperation with
fifteen legal orders applying different rules of both substance and procedure. The current
methods of cooperation often prove insufficient to overcome the difficulties faced by the
judicial and police authorities in their fight against such fraud.

These difficulties will increase as the number of Member States and the number of operators
and administrations involved in the management of Community funds rise.

The powers which this Communication proposes should be vested in a European Public
Prosecutor would be limited strictly to the protection of the Community’s financial interests
as already defined and circumscribed in Article 280(1) of the EC Treaty.

Only the essential characteristics of the office would be laid down in the Treaty (appointment,
removal, duties, and independence), leaving the rules and mechanisms governing its operation
to be regulated by secondary legislation.

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2

COM(2000) 34; http://europa.eu.int/comm/igc2000/offdoc/opin_igc_en.pdf
Protecting the Communities’ Financial Interests and the Fight against Fraud: annual report 1998,
COM(99) 590 final, section 1.3.

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1.

THE COMPLEXITIES TO BE OVERCOME IN VIEW OF THE COMMUNITY’S SPECIFIC
RESPONSIBILITIES FOR THE PROTECTION OF THE COMMUNITY’S FINANCIAL
INTERESTS

The shortcomings of the current mechanism are due mainly to the fragmentation of
the European criminal law-enforcement area, which results from the fact that the
national police and judicial authorities are empowered to act only on their own
territory. The traditional methods of mutual judicial assistance and cooperation
between police forces remain cumbersome and are often unsuited to an effective
fight against
transnational fraud. And experience has shown the difficulties of
making a success of administrative inquiries in terms of prosecutions.

But the Community’s financial interests ought to be protected especially rigorously
and in equivalent fashion in all the Member States, since the money involved
represents pooled resources. Responsibility for ensuring that
the Community’s
financial interests are protected rests on the Member States and the Community both.
The European Union must be able to guarantee the Member States and their citizens
that offences of fraud and corruption are genuinely prosecuted in the courts.

1.1.

The fragmentation of the European law-enforcement area

illegal activities affecting the financial

Article 280 EC states that measures adopted by the co-decision procedure to counter
fraud and any other
the
law or the
Community “shall not concern the application of national criminal
national administration of justice”. The EC Treaty as its stands, therefore, confers no
powers to set up a European criminal law-enforcement area comprising a common
judicial body such as a prosecutor.

interests of

The signing of the Convention on the protection of the financial interests of the
European Communities of 26 July 1995 and of its additional protocols constitutes a
first step towards the criminal protection of the Community’s financial interests.
These documents, which are the fruit of cooperation between governments under the
“third pillar”, are an important asset since they define fraud, misapplication of funds
and corruption as offences incurring criminal penalties in all Member States.

But the Convention and its protocols have not yet entered into force as they have not
been ratified by all the contracting parties. When they are in force, there will still be
a degree of uncertainty as to the way in which they will be transposed into national
criminal law by all the parties. What is more, these provisions alone will not suffice
to eliminate the fragmentation of the European law-enforcement area as prosecutions
will still be brought at national level.

Thus, given that there are fifteen different systems of criminal law, the Community
has only very limited means to ensure effective and equivalent protection of the
Community’s financial interests in the Member States, as required by the Treaty. In
the
the current situation, however effective the administrative coordination that
European Anti-fraud Office can generate, criminal proceedings remain uncertain.
The Community does not have the instruments to supplement preventive action and
administrative inquiries with a prosecution function.

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Example:

The effect of the fragmentation of judicial authorities between the Member States is
that there can be competing, partial or non-existent proceedings.

The ban on beef and veal exports from certain areas of the Community owing to BSE
infection was circumvented by operators in three Member States when exporting to a
non-member country. Commission action and the exposure of this scheme to defraud
the agricultural subsidy system led thereafter
to the opening of competing
prosecutions in several Member States against the same offenders for the same
offences. Yet although the proceedings began in mid-1997, the case has come to
judgment in only one Member State.

This situation is unacceptable, in particular in areas of Community activity where
subsidies are the rule, such as the common agricultural policy.

1.2.

The traditional methods of judicial cooperation between the Member States are
cumbersome and inappropriate

National mechanisms are the basis for criminal protection against transnational crime
and remain essential. There are also international forms of cooperation in criminal
matters, now boosted by the strengthened provisions for judicial cooperation under
the third pillar.

But
the development of organised crime to the detriment of the Community’s
financial interests makes the traditional instruments of mutual judicial assistance
inadequate, and the progress achieved in judicial cooperation is also insufficient.
There is no possibility of providing an interface between the Community level and
the national judicial authorities in the Treaty as it stands.

Example:

The inadequacy of cooperation between Member States in criminal matters generates
delays, dilatory actions and unpunished offences. In transnational financial fraud
cases it all too often allows evidence to be destroyed and suspects to disappear. This
is particularly prejudicial when it comes to reconstructing downstream financial
channels used in cases of fraud against the Community’s financial interests.

To take but one example, on the occasion of a public hearing before the European
Parliament, a prosecutor from a Member State stated that he had had to deal with as
many as 60 successive actions in the requested State in a single case likely to affect
the Community’s financial interests. The actions were brought one after the other to
benefit in each instance from the time needed by the judge to dismiss them. It
follows that, when the international letters rogatory are executed, they will generally
be of no real use.

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1.3.

Difficulties
prosecutions

in making administrative

inquiries

culminate

in successful

Numerous cases based on the Community experience in recent years thus testify to
persistent obstacles in a field where precisely the specific responsibilities of the
Community and the Member States create the need for a clear perception of the
interests to be protected and for greater efficiency in proceedings in terms of the
Community territory.

Example:

The transmission of information between Member States and between them and the
is hampered by differences in the rules
European Anti-fraud Office (OLAF)
governing prosecutions in each Member State. If, for the same offence, the inquiry is
handled in some Member States by a judge but in others by an administrative
authority, direct contact between the two is generally impossible in both fact and law.
Moreover, not all the relevant national authorities even have access to information
under the various national rules, in particular those concerning the secrecy of tax and
business information or the confidentiality of criminal investigations.

Example:

An attempt to prosecute the organisers of an major transnational fraud detrimental to
the Community’s own resources in two Member States, A and B, is an exemplary
real case in this respect. A judge in a third Member State (C), where the accused
actually resided, to whom the case was referred by the national customs authorities
declared their action inadmissible on the specific ground that the certificate provided
by the authorities of Member State A was insufficient for the purpose of proceedings
in Member State C. This certificate confirmed, however, that
the offence was
punishable under the law of Member State A and referred to the penalties incurred by
offenders in that State. Under the rules of Member State C, however, the judge was
unable to admit the certificate issued by the customs authorities of Member State A
as valid evidence.

2.

THE PROPOSED MECHANISM

***

In the absence of a specific Community institutional structure the existing
mechanisms, however legitimate and irreplaceable they may be, amount to obstacles
to prosecution by the police and the courts and advantages for the criminal. Given the
design of the Treaty, therefore, the Commission recommends that in order to respond
to the current situation the primary legislation should be amplified to allow the
creation of an office of European Public Prosecutor, its organisation and operation
being governed by secondary legislation. This amendment would be confined to
protection of the Community’s financial interests.

2.1.

Mature and detailed preparatory study

The Commission proposal to the Intergovernmental Conference is based on detailed
the request of the European
preparatory work. For nearly ten years now, at

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Parliament and the Commission, a group of experts in criminal law from all the
Member States has been working on the criminal protection of the Community’s
financial interests. Their work produced the proposal for a set of rules for the
criminal protection of the Community’s financial interests, the well-known Corpus
Juris.3 It recommends the creation of a unified Community law-enforcement area as
regards the preparatory stages of court proceedings precisely by the harmonious
insertion in the national systems of a European Public Prosecutor, excluding any
communitarisation of the administration of criminal justice.4

The authors of the Corpus Juris specified the possible architecture of an independent
European Public Prosecutor,
the
Community’s financial interests for directing investigations and prosecuting cases in
the relevant national courts and for coordination with national procedures.

responsible in matters of

the protection of

The organisation would be highly decentralised. The European Public Prosecutor
would be supported by Deputy European Prosecutors in the Member States so as to
secure the link between the Community mechanism and the national legal systems.

2.2.

The object of the reform

In this spirit,
European Public Prosecutor to protect the Communities’ financial interests.

the Commission recommends the institution of an independent

This would supplement the reform of the Community courts as proposed by the
Commission in its additional contribution to the Intergovernmental Conference of
1 March 20005 by adding a judicial body with the function of bringing prosecutions
in the courts of the Member States and of exercising ongoing control of criminal
investigations across the Community territory in order to enforce the law and protect
the Community’s finances. The point is not to communitarise the administration of
criminal justice, which would remain within national powers.

2.3.

The methods of the reform

In the Commission’s view, the Treaty will need amending only as regards the
from office and the
European Public Prosecutor’s appointment and removal
definition of his main tasks and the principal characteristics of his function, to be set
out in a new Article 280a. The Treaty would provide for secondary legislation to lay
down the regulations applicable to him and govern his operation.

3

4

5

Corpus Juris introducing penal provisions for the purpose of the financial interests of the European
Union, under the direction of Mireille Delmas-Marty, Economica, Paris, 1997. The text of the Corpus
Juris is also available on the Internet (http://www.law.uu.nl/wiarda/corpus/index1.htm).
In response to these recommendations, the experts more recently completed a comparative study into
the need, legitimacy and feasibility of the Corpus Juris, analysing the potential impact of a European
Public Prosecutor on national prosecution systems: The implementation of the Corpus Juris in the
Member States, Mireille Delmas-Marty and J.A.E. Vervaele (eds.), Intersentia, Utrecht, 2000.
Additional contribution of
reform: the reform of the Community courts, COM/2000/109 final.

the Commission to the Intergovernmental Conference on institutional

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2.3.1.

The appointment of the European Public Prosecutor (paragraphs 1 and 2 of the new
Article 280a)

interests, would be submitted, for example,

The Commission proposes that the European Public Prosecutor be appointed by the
Council, acting by a qualified majority on a proposal from the Commission with the
assent of the European Parliament. The proposal, which should be made by the
Commission in view of its specific responsibility for protecting the Community’s
financial
in the form of a list of
candidates from which the Council could select the European Public Prosecutor. The
Commission further considers that conditions governing the removal from office of
the European Public Prosecutor should be laid down (paragraph 2 of new Article
280a). Regarding the term of the office, the Commission proposes a non-renewable
term of six years (paragraph 1 of new Article 280a). An essential characteristic of
the European Public Prosecutor must in particular be stressed: his independence as a
judicial officer (paragraph 2 of new Article 280a). Apart from these essential
elements, the revised Treaty would leave the regulations governing the Prosecutor in
respect of such things as structure, location of offices, etc. to be determined by
Community secondary legislation in accordance with the procedure laid down in
Article 251 of the Treaty, which calls for a qualified majority in the Council and
co-decision with Parliament.

2.3.2. Conditions for the exercise of

the European Public Prosecutor’s functions

(paragraph 3 of the new Article 280a)

With regard to the conditions for the exercise of the European Public Prosecutor’s
functions, a specific mechanism confined to activities detrimental
to the
Community’s financial interests is necessary to ensure smooth operation in terms of
both substantive criminal law and criminal procedure. These rules should be adopted
by the Council by the co-decision procedure.

To clarify the Prosecutor’s powers, offences relating to activities prejudicial to the
Community’s financial interests (fraud, corruption, money laundering etc.) and the
relevant penalties should be defined more explicitly at Community level. It
is
difficult to reconcile the rigour of the criminal law with the existence of differences
throughout the Community if the point is to ensure the effective and equivalent
protection of the Community’s financial interests. The definitions of these common
offences should therefore be uniformly applicable in the national legal systems by
the national criminal courts, as the ordinary courts of Community law, and this
implies the adoption of specific rules. The provisions drawn up under the Convention
of 26 July 1995 referred to above and its additional protocols already provide a solid
basis that has the agreement of the Member States.

Moreover, the performance of the Prosecutor’s duties will have to be made subject to
rules of procedure (on such points as the mechanisms for referring cases to the
Prosecutor, the Prosecutor’s powers of investigation, or the initiation and termination
of enquiries) and rules of judicial review (on such points as the review of acts done
by the Prosecutor, whether or not under a warrant granted by a national judge). The
Corpus Juris describes some possible options for rules of procedure and coordination
with the national authorities. Rules of this kind will in any event have to be spelt out
in proposals for secondary legislation, which will have to respect the national legal
systems and traditions. Provision must therefore be made for the enactment of the
following, by the procedure laid down in Article 251 of the Treaty:

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– rules concerning offences (subparagraph 3(a) of the new Article 280a)

– rules of procedure applicable to the activities of the Prosecutor and rules
governing the admissibility of evidence (subparagraph 3(b) of the new Article
280a)

– rules for the judicial review of the Prosecutor’s actions, such rules being essential
for the performance of his duties (subparagraph 3(c) of the new Article 280a).

These provisions of secondary legislation should also determine how this Community
mechanism meshes with the national legal systems.

***

the Commission proposes that

In conclusion,
the current
provisions concerning the protection of the Community’s financial interests with a legal basis
allowing:

the Conference supplement

• the appointment of an independent European Public Prosecutor exercising the prosecution
function in the courts of the Member States in the field of the protection of the
Community’s financial interests and within the framework of specific rules adopted for this
purpose; and

• the subsequent adoption through secondary legislation of:

– the regulations applicable to his office,

– rules of substantive law concerning the protection of financial interests by the European

Public Prosecutor (offences and penalties),

– rules governing criminal procedure and the admissibility of evidence,

– rules concerning judicial review of actions taken by the Public Prosecutor

in the

performance of his duties.

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Current text of EC Treaty

Article 280

Proposed text

Article 280

1. The Community and the Member States shall counter fraud and any
other illegal activities affecting the financial interests of the Community
through measures to be taken in accordance with this Article, which shall
act as a deterrent and be such as to afford effective protection in the
Member States.

1. The Community and the Member States shall counter fraud and any
other illegal activities affecting the financial interests of the Community
through measures to be taken in accordance with this Article, which shall
act as a deterrent and be such as to afford effective protection in the
Member States.

2. Member States shall take the same measures to counter fraud affecting
the financial interests of the Community as they take to counter fraud
affecting their own financial interests.

2. Member States shall take the same measures to counter fraud affecting
the financial interests of the Community as they take to counter fraud
affecting their own financial interests.

3. Without prejudice to other provisions of this Treaty, the Member States
shall coordinate their action aimed at protecting the financial interests of
the Community against fraud. To this end they shall organise, together
with the Commission, close and regular cooperation between the
competent authorities.

3. Without prejudice to other provisions of this Treaty, the Member States
shall coordinate their action aimed at protecting the financial interests of
the Community against fraud. To this end they shall organise, together
with the Commission, close and regular cooperation between the
competent authorities.

4. The Council, acting in accordance with the procedure referred to in
Article 251, after consulting the Court of Auditors, shall adopt
the
necessary measures in the fields of the prevention of and fight against
fraud affecting the financial interests of the Community with a view to
affording effective and equivalent protection in the Member States. These
measures shall not concern the application of national criminal law or the
national administration of justice.

5. The Commission, in cooperation with Member States, shall each year
submit to the European Parliament and to the Council a report on the
measures taken for the implementation of this Article.

4. The Council, acting in accordance with the procedure referred to in
Article 251, after consulting the Court of Auditors, shall adopt
the
necessary measures in the fields of the prevention of and fight against
fraud affecting the financial interests of the Community with a view to
affording effective and equivalent protection in the Member States.
Without prejudice to Article 280a, these measures shall not concern the
application of national criminal law or the national administration of
justice.

5. The Commission, in cooperation with Member States, shall each year
submit to the European Parliament and to the Council a report on the
measures taken for the implementation of this Article.

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Article 280a

1. To contribute to the attainment of the objectives of Article 280(1), the
Council, acting on a proposal from the Commission by a qualified
majority with the assent of the European Parliament, shall appoint a
European Public Prosecutor for a non-renewable term of six years. The
European Public Prosecutor shall be responsible for detecting,
prosecuting and bringing to judgment the perpetrators of offences
prejudicial to the Community’s financial interests and their accomplices
and for exercising the functions of prosecutor in the national courts of
the Member States in relation to such offences in accordance with the
rules provided for by paragraph 3.

2. The European Public Prosecutor shall be chosen from persons whose
independence is beyond doubt and who possess the qualifications
required for appointment to the highest judicial offices in their
respective countries. In the performance of his duties, he shall neither
seek nor take any instructions. The Court of Justice may, on
application by the European Parliament,
the Council or the
Commission, remove him from office if he no longer fulfils the
conditions required for the performance of his duties or if he is guilty
of serious misconduct. The Council, acting in accordance with the
procedure laid down by Article 251, shall lay down the regulations
applicable to the European Public Prosecutor.

3. The Council, acting in accordance with the procedure laid down by
Article 251, shall
lay down the general conditions governing the
performance of the functions of the European Public Prosecutor and
shall adopt, in particular:

(a) rules defining the facts constituting criminal offences relating to
fraud and any other
to the
Community’s financial interests and the penalties incurred for
each of them;

illegal activity prejudicial

(b) rules of procedure applicable to the activities of the European

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Public Prosecutor and rules governing the admissibility of
evidence;

(c) rules applicable to the judicial review of procedural measures
taken by the European Public Prosecutor in the exercise of his
functions.

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